AUTO MONEY FUELS TRUMP
U.S. president points to industry investment decisions as a sign he is delivering on promises,
Ford will invest $1.2 billion (U.S.) to build or modernize three facilities in Michigan where it plans to assemble trucks and SUVs, and to store consumer data, a reflection of the trends that are fundamentally reshaping the auto industry’s business model and manufacturing operations in the U.S.
U.S. President Donald Trump preempted the “big announcement” with an early morning tweet in which he touted, “Car companies coming back to U.S. JOBS! JOBS! JOBS!”
Trump has pointed to a series of investments in domestic manufacturing that automakers have recently announced as a sign his administration is delivering on its economic promise to bring jobs back to the United States.
Ford, Fiat Chrysler and General Motors, among other companies, got early mentions in his joint address to Congress last month for investing and hiring in the U.S.
But such massive investment decisions take longer to plan and execute than Trump has been in office. The investments Ford announced Tuesday, for example, are part of a 2015 contract between the automaker and United Auto Workers in which the company agreed to invest $9 billion and create or retain 8,500 jobs through 2019.
Unifor, the union representing Canadian workers at Ford, GM and Fiat Chrysler says it secured spending commitments from the Detroit automakers during contract talks last year including $713 million (Canadian) in Ford’s Canadian operations.
Joseph Hinrichs, Ford’s president for the Americas, said in an interview that the company reached out to Trump shortly before 8 a.m. this morning about the announcement, so it is unclear what prompted the president’s 140-character missive at 6:36 a.m. The Detroit News reported the investments Monday night in a story citing anonymous sources.
Ford will spend $850 million to upgrade the Michigan Assembly Plant, where it plans to manufacture the Bronco and Ranger. Ford revealed at the North American International Auto Show in January that it planned to resurrect the fan favourites, which have been retired from the U.S. market for many years. The investment will secure 3,600 jobs at the plant, a spokesperson said.
That investment comes as more U.S. consumers are buying large vehicles; trucks and SUVs made up about 60 per cent of new vehicle sales in 2016. Because big vehicles tend to fetch big sticker prices, automakers can profitably manufacture them in the U.S. while smaller vehi- cles are increasingly built in Mexico and other countries where labour is cheaper.
Ford will invest another $150 million and add 130 jobs at its Romeo Engine plant.
The balance of the investment, $200 million, will be used to construct a data centre where Ford plans to store consumer information related to connected and autonomous cars.
While it is unclear that Trump has had any impact on the industry’s investments beyond the timing of the announcements, Ford chief executive Mark Fields and other auto executives have said they expect his administration will be favourable on issues like environmental regulations and tax reform.
Already, Trump has announced plans to review fuel efficiency standards that the U.S. Environmental Protection Agency put in place during the Obama administration. He told autoworkers in Michigan earlier this month that he would not allow regulations to threaten jobs and factories. With a file from the Star